No agreement on how to fund medical watchdog unit

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SPRINGFIELD – Illinois officials and the physicians they regulate are at odds over how to fairly cover the costs of a watchdog unit that investigates complaints against doctors.

The two sides have offered competing proposals to fix the finances of the struggling medical unit of the Illinois Department of Financial and Professional Regulation, which was forced to lay off more than half of its employees last month when the Legislature declined to bail it out.

Gov. Pat Quinn's administration wants to more than double doctors' licensing fees and to borrow millions of dollars, a proposal a House committee approved by a 7-5 vote on Monday and now moves to the full House.

"We are looking at a long-term horizon," Manuel Flores, secretary of financial and professional regulation, told the House Executive Committee. "We want to make sure that we have the resources in place to expedite licenses and do a better job of investigating and disciplining our doctors who have breached the public trust."

But doctors strongly disagree, saying taxpayers' dollars should be used to restore the money previous administrations used to finance other state programs.

During the General Assembly's lame-duck session in December, a measure that could have prevented the layoffs of 18 of the 26 employees in the department's medical unit passed the Senate but failed in the House. The department blamed the proposal's failure on lobbying from the Illinois State Medical Society.

The universal agreement, however, is that the watchdog unit urgently needs money to efficiently operate.

Officials from department want the legislature to authorize an increase of doctor licensing fees for the first time in 26 years – from $100 to $250 a year. They also want to borrow $6.6 million from a tax fund to immediately rehire the employees that were laid off Jan. 15.

Sue Hofer, a spokeswoman for the department, said the unit would repay the short-term loan through the fee increase. She said the government's proposal would ensure the financial health of the unit through 2026.

The medical society fiercely opposes the state's proposal, and suggests increasing fees by $67. The group also wants to transfer $9.6 million from the state's General Fund, financed by taxpayers, to pay for the costs of running the department.

Dr. William Werner, the group's president, said the government's proposal is "unfair." Physicians have argued that the fund is bankrupt because of $8.9 million of authorized sweeps under former Gov. Rod Blagojevich's administration.

"We want to see this resolved," Werner said. "It is fundamental to our profession to make sure that only qualified, educated physicians with a good track record are practicing in Illinois."

The department processes every year nearly 2,600 license applications from new doctors and 2,300 temporary licenses applications from medical residents. The department also renews every three years almost 46,000 licenses for doctors.

Since the layoffs, processing times for physician licenses have increased from 16 business days to 6 months, as only one employee is processing licensing applications.

And as many as 2,500 newly minted doctors report to Illinois hospitals every year for residencies – a choice medical-school graduates must make by Feb. 20, said House Majority Leader Barbara Flynn Currie, the measure's sponsor. Without assurances they can get licensed by summer when their rounds begin, those doctors will go elsewhere, the Chicago Democrat said.

The unit also investigates and prosecutes physicians suspected of wrongdoing. The department prosecuted 369 in 2012. Salaries in the watchdog unit are solely funded through doctors' fees. Taxpayers do not contribute to these salaries.

Illinois doctors currently pay less in renewal fees than advanced nurse practitioners, optometrists and podiatrists practicing in the state. Should the legislature adopt any of the proposed fee increases, Illinois physicians would still pay less than their colleagues in other states. Doctors in New York pay a renewal fee of $300 per year, $392 in California and $404 in Texas.

Republicans opposed the Currie plan, saying the fee increase is far too steep. Rep. Ed Sullivan, a Mundelein Republican, pointed to a memo from Flores indicating that under the current fee structure, the fund would have been solvent through 2016 – were it not for Blagojevich fund sweeps. To Sullivan, that means the new plan makes doctors pay for the sweeps, but Flores countered that the increase will cover increasing costs in the coming decade as well.